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RESOLUTION OF THE EXXON VALDEZ OIL spiLL TRUSTEE COUNdJt t.J L:; p": .'~; [j '; !l: '-.~ fl

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We, the undersigned, duly authorized members of the Exxon

Valdez Oil Spill Trustee Council, after ex,~;~"~.~J?t~~.:;!:~~~~~~~i/:~1\~ after

consideration offhe views of the publiCI find as follows:

l. The Eyak Corporation (I1Eyakl1) I owns the surface estate of I

or has valid prioritized selections on l lands in the Chugach

National Forest (I1Forest n ) I which include parcels known as Power

Creek I Eyak River I and Eyak Lake (together n the Core Lands 11) I

consisting of approximately ll/200 acres I and generally depicted on

Exhibit A. The reduction in acreage from prior descriptions of the

Core Lands contained in previous analysis and resolutions of the

Trustee Council I which consisted of approximately l3 / 700 acres l is

due in part to the removal by Eyak of three parcels of land for

future development. Sherstone l Inc. (flSherstone l1 ) is a wholly-

owned subsidiary of Eyak that holds timber rights on the Core

Lands. These lands were selected and conveyed pursuant to the

Alaska Native Claims Settlement Act. The subsurface rights

associated with these lands are held by Chugach Alaska Corporation.

2. These lands are within the oil spill area as defined by

the Trustee Council in the Final Restoration Plan.

3. Eyak and Sherstone have recently indicated an intent to

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develop the Core Lands through logging operations commencing on

March lSI 1996. Eyak and Sherstone have also indicated a desire to

sell the Core Lands in fee simple to the United States as part of

the Trustee Council's program for restoration of the natural

resources and services that were injured by the Exxon Valdez Oil

Spill ("EVOS")

4 . The Core Lands include important habitat for various

species of fish and wildlife for which significant injury resulting

from the spill has been documented. The Trustee Council's habitat

acquisition analysis indicates the Core Lands have high value to

benefit such injured natural resources as sockeye salmon[ cutthroat

trout, Dolly Varden, and river otters, as well as a high

restoration value for recreational use. Eyak Lake and Power Creek

provide major spawning and rearing habitat for sockeye salmon,

cutthroat trout and Dolly Varden. Annual sockeye escapement into

Eyak Lake lS estimated at lS, 000 to 25 I 006· fishi most spawning

occurs along the lakeshore. Eyak River is a maj or' migration

corridor for anadromous fish and supports major commercial,

recreational, and subsistence fisheries. River otters use the Core

Lands for feeding and denning. Acquisition of the Core Lands will

benefit fish and waterfowl and the services they support primarily

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by protecting the watershed from activities such as logging that

may adversely affect water quality and quantity in Power Creek and

Eyak Lake. Because Eyak Lake is shallow, it is particularly

sensitive to possible eutrophication resulting from lake shore

development. Protection of the land surrounding the lake will

limit the risk of this occurrence. The Core Lands also have high

scenic value because they are visible from the Copper River

HighwaYi acquisition will preserve this scenic quality. The area

is accessible by road and trail and receives high use by residents

of Cordova for fishing, hunting, and plant gathering. Because of

its proximity to Cordova and road access, there is a significant

likelihood that development could occur on these lands. Although

the size of the Core Lands has been reduced somewhat because Eyak

has chosen to retain some areas, the Trustee Council finds that the

remaining acreage retains significant attributes that will promote

the restoration of injured resources.

5. Existing laws and regulations, including but not limited

to the-Alaska Anadromous Fish Protection Act, the Clean Water Act,

the Alaska Coastal Management Act, the Bald Eagle Protection Act,

and the Marine Mammal Protection Act, are intended, under normal

circumstances I .to protect resources from serious adverse effects

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from activities on the Lands. However r restoration r replacement r

and enhancement of natural resources r and acquisition of equivalent

resources and services injured r lost or reduced as a result of the

EVOS present a unique situation. Without passing judgment on the

adequacy or inadequacy of existing law and regulations to protect

resources r biologists r other scientists, and other resource

specialists agree that, in their best professional judgment,

protection of habitat in the spill area to levels above and beyond

that provided by existing laws and regulations will likely have a

beneficial effect on recovery of injured resources and lost or

reduced services provided by these resources.

6. There is widespread public support for the acquisition of

the Core Lands.

7. The purchase of the Core Lands is an appropriate means to

restore a portion of the injured resources and reduced services in

the oil spill area. Acquisition of these lands is consistent with

the Final Restoration plan.

8, It is ordinarily the Federal Government t s practice to

purchase property based on a value determined through a fair market

value appraisal for the land interests to be acquired. Although a

fair market value appraisal has not been completed r the United

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States has procured a draft appraisal for the underlying land value

and a preliminary estimate of value of the timber located on a

portion of the Core Lands. The combined initial estimate of value

of the Core Lands is between $2.9 to $3.9 million.

9. Fair market value is an economic concept and does not

reflect the benefits of the acquisition to the restoration of the

injured natural resources. The habitat analyses prepared for the

Trustee Council demonstrate that there is a need to acquire these

lands promptly to promote the recovery of the injured natural

resources by preventing any potential degradation of the habitat

resulting from development. Furthermore, the United States has no

authority to acquire these lands from the seller except on the

basis of a mutually negotiated purchase price. Based on prior

negotiations with Eyak and Sherstone, the Trustee Council believes

that the initial estimate of fair market value is not an acceptable

purchase price to Eyak and Sherstone. Accordingly, we find that it

is appropriate to. pay more than the initial estimate of fair market

value. for the Core Lands in order to obtain the resulting benefits

for the restoration program.

THEREFORE, we supersede our resolution of December 2, 1994,

related to Eyak and Sherstone land and timber interests and all

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other Trustee Council offers. We resolve to authorize funding for

an offer to purchase the Core Lands in fee simple and to provide

the funds, if the offer is accepted, in the amount set forth below

for the United States, acting through the Forest Service, to enter

into appropriate agreements in conformity with applicable Federal

and State law to purchase and acquire the interests. Such

agreements shall contain and are subject to the following

conditions and terms:

(a) fee simp~e acquisition of the land identified in Exhibit

A. The offered purchase price for the interests in the Core Lands

shall be $7 million. This offer represents the lump-su~ payment

price. Because of the installment payment schedule provided for in

the Exxon settlement agreement and the resulting limited

availability of funds, an offer that reflects a value that provides

Eyak and Sherstone a benefit for selling their interests in these

lands over the course of several years will be considered by the ,"

Trustee Council if Eyak and Sherstone prefer such method of

payment. The amount of this benefit will depend on the payment

schedule agreed to by the parties. If an interim approved

appraisal determines the fair market value of the Core Lands is

more than $7 million, the Trustee Council will consider a new offer

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for the Core Lands. For purposes of this resolution, the interim

approved fair market value appraisal shall be considered the final

approved appraisal. This offer is valid until withdrawn by the

Trustee Councilor the date on which timber harvesting operations

begin on the Core Lands.

(b) receipt by the United States District Court for the

District of Alaska (IIDistrict Court") of the settlement payments

due from EXxon Corporation, et ali

(c) disbursement of these funds by the District Court;

(d) completion of a satisfactory title search;

{e) no pre-closing development on the Core Lands;

(f) approval by the shareholders of Eyak and Sherstone for the

sale of the interests in the Core Lands;

(g) Congressional review to the extent required with respect

to acquisitions by the Forest Service pursuant to House Report No.

102-116;

(h) completion of a satisfactory hazardous substances survey;

(i) satisfactory compliance with the National Environmental

Policy Act and other applicable state and federal law.

(j) Eyak and Sherstone agree to continue to negotiate in good

faith with the Forest Service and the State of Alaska regarding the

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acquisition of other land interests that have high value for

purposes of restoration.

By unanimous consent, and upon execution of the purchase

agreements and written notice from the Forest Service and the State

of Alaska to the Executive Director of the Exxon Valdez Oil Spill

Trustee Council that the terms and conditions set forth herein and

in the purchase agreements have been satisfied, we request the

Alaska Department of Law and the Assistant Attorney General of the

Environment and Natural Resources Division of the u.S. Department

of Justice to petition the District Court for withdrawal of the

appropriate sum to be paid at closing from the District Court

Registry account established as a result of the Governments·

settlement. The appropriate sum is $7 million if a lump-sum

purchase is made. The sum of the installment payments is authorized

for withdrawal if an installment payment schedule is agreed to by

the parties. The lump-sum payment or the sum of the installment

payments are the only amounts due under this resolution to Eyak and

Sherstone by the United States or the State of Alaska from the

joint funds in the District Court Registry" and no additional

amounts are herein authorized to be paid to Eyak and Sherstone from

such joint funds.

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Dated this 29th day of February, 1996, at Juneau and Anchorage, Alaska.

GEORGE T. FRAMPTON, JR. Assistant Secretary for Fish & Wildlife and Parks U.S. Department of the Interior

Commissioner Alaska Department of

Fish and Game

~47::fa· ~RUCE:~TELHO , At torney General ....

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State of Alaska

.~ S;;VENiE~

. Director, Alaska Region National Marine Fisheries

NOAA

MICHELE BROWN Commissioner Alaska Department of

Environmental Conservation

$alma Pt

• North Rock

Observation

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EXHIBIT A

LEGEND

L Eyak Core Parcel Boundary

Eyak Corporation Exclusions

Cabin

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